Tuesday, May 10, 2011

ChinaWatch: Forward Frontiers

Welcome to ChinaWatch, WMB’s digest of news from the country with the world’s second largest economy and our chief rival to global dominance. Our aim is to keep you informed.

True Car Culture

After more than an eightfold increase in auto sales over the past decade, China has developed a true car culture.

Amid the buzz for last month's Shanghai auto show, ads for a single car papered entire subway stations in Shanghai, a city of 19 million people. Outside a luxury hotel, an employee is overcome as she takes photos of a red Ferrari. “Oh, it's beautiful!” she says.

Auto plants throughout China, with potted bamboo or fish tanks in break areas, are viewed as essential to the development of smaller cities of a million or more people.

After a decade of double-digit annual sales growth, excepting one year, light-vehicle sales in China topped 17 million last year. While that represented a 33 percent year-over-year increase, it was smaller than the 48 percent surge in 2009.

Still, China's growth is slowing.

Government actions held growth in the first quarter to about 8 percent, compared with a 20 percent increase in the recovering U.S. market, where sales haven't hit 17 million since 2001. Last year, U.S. sales were a below-average 11.6 million.

For Ford Motor Co. and Chrysler Group, which are still getting established in China, the slowing market means they largely missed out on a stretch of record growth, and, in some cases, profits.

Chrysler is leaning on a small business importing Jeeps, while its part owner Fiat is introducing its 500 minicar in China this year and won't have a locally built car to sell until next year. Ford's 2010 light-vehicle share was 3.4 percent.

“We could have gone faster and should have gone faster in China,” says Joe Hinrichs, CEO of Ford China.

For General Motors Co., whose sales in China last year made up 28 percent of its worldwide volume, the slowdown might mean a chance to catch its breath. After having doubled its sales in two years, GM is planning to take five years to accomplish the feat again.

Missions To Mars

U.S. President Barack Obama views China as a potential partner for an eventual human mission to Mars that would be difficult for any single nation to undertake, according to a senior White House official.

Near-term engagement with China in civil space will help lay the groundwork for any such future endeavor, says White House science adviser John Holdren.

He prefaced his remarks, before the House Appropriations subcommittee on commerce, justice and science, with the assertion that human exploration of Mars is a long-term proposition and that any discussion of cooperating with Beijing on such an effort is speculative.

“(What) the president has deemed worth discussing with the Chinese and others is that when the time comes for humans to visit Mars, it's going to be an extremely expensive proposition and the question is whether it will really make sense — at the time that we're ready to do that — to do it as one nation rather than to do it in concert,” Holdren says.

Holdren, maintaining NASA could also benefit from cooperating with China on detection and tracking of orbital debris, stresses that any U.S. collaboration with Beijing in manned spaceflight would depend on future Sino-U.S. relations.

“But many of us, including the president, including myself, including (NASA Administrator Charles) Bolden, believe that it's not too soon to have preliminary conversations about what involving China in that sort of cooperation might entail,” Holdren says.

“If China is going to be, by 2030, the biggest economy in the world … it could certainly be to our benefit to share the costs of such an expensive venture with them and with others.”


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